Two gamers have filed a class action lawsuit against Nintendo, alleging that the company will be unjustly enriching itself with any refund it secures from the U.S. government over widespread tariffs last year that, among other things, hiked the prices of Nintendo hardware and accessories.
“Unless restrained by this Court, Nintendo stands to recover the same tariff payments twice—once from consumers through higher prices and again from the federal government through tariff refunds, including interest paid by the government on those funds,” the suit states.
What is the logic behind giving a company money for the tariffs? The costs were invariably passed to the consumer, so how does paying the company make any sense?
The logic was “these companies ate the cost” and when confronted with the fact that prices went up and the costs had been passed on to consumers, the clarification they provided was “nuh uh”.
the argument is, when a price goes up, there will be fewer sales and therefore less revenue/profit
Which makes me want to say things that would get me banned for multiple reasons.
You have now been banned from Lemmy.World
This is America. You’re not a person unless you’re a corporation.
It didn’t take long to go from “corporations are people” to “the only people that matter are corporations”
The companies are the ones who paid the tariffs directly and then passed the cost onto their customers.
The companies paid the tarrif, they get the refund.
The fact that tariffs allowed some companies to demand more money, is related but not causal, some companies will have had to eat shit because the market wouldn’t bare the increase.
I’d love for the lawsuit to succeed and it set the precedent that when governments issue refunds they can force companies to pass it on to the customer, but I think it’s unlikely.
It’s also complicated by the way pricing works.
If the tarrif is for $15 but the uncertainty allowed a company to increase prices by $20, how much should the customer be refunded?
And what if the tarrif was $15 but the market only allowed a $10 increase and the company ate shit on the other $5?
Now what if none of these numbers are set in stone and all of the numbers are guesswork? Should the government audit all companies that changed their prices?
They should not be allowed to price based on “uncertainty” - if the tariff increases by 15, the buyer should pay that much and no more. So, anyone who bought at the increased 20 dollar price should receive 5 back.
Of course they’ll never do this.
All pricing under capitalism is based on uncertainty.
What the market will bare isn’t a known thing.
Side-note: this is why YIMBYs are dumb as fuck when they apply econ101 to rents.
That’s great in theory, but in practice these days the US sets tariffs the way rideshare companies do surge pricing.
Also what happens when the companies are forced to eat part of the tarrif, if the tarrif is 15, but that pushes the prices above the maximum profit point (units sold * per unit profit) then how much tarrif back should the customer get?
Fuck that. They should push back against the government.
They did and they got the tarrifs refunded.
The issue is that with markets nothing is tightly coupled.
Personally, I don’t think anyone should get anything back for unnecessary luxury items like video games. Food and health products? Maybe. Video games? No way. If you’re willing to pay $90 for a video game designed for five year olds, you can afford to take the hit.
There’s no logic. They don’t know how to fix the things they broke.
Taxpayers paid the tariffs once when prices got hiked, paid the resulting inflation costs, now we are paying those companies back with taxpayer money, which will continue to drive up inflation again.
We’re paying 4 times.
The logic is real “dumb” or simple. The company that paid the tariff gets the refund.
Tariffs are paid at the port of entry and before you are allowed to physically get the goods out of the port. So the payer is not always the manufacturer. Sometimes it’s an importer or middleman. Sometimes a retailer. It could be you if you shipped in a package from overseas.
Well, the logic is the fact that the tariffs were illegal.
The honourable thing to do would be to pay that money back to the customers, but that would make the shareholders sad and grumpy, so it’s never going to happen.
Corruption
That is far from the universal standard especially for non-s&p500 companies who compete against the prices set by the s&p500 companies. In competative markets/industries the importing party doesnt always have controll over when their order ships and what the tariff rates will be at time of shipment. It takes 3-6 months for large import orders to be dwlivered with landed price adjustments. The list price isnt going to fluctuate with every penny movement. The price is dictated by the market price and share of market a company holds. So a lot of times the tariff shock isnt going to find its way to the list price in any less than 3-6month time span. To reiterate, this is for products in a competative market. Your iphones, pc parts, game consoles are not competstive markets. The pipe fitting valve (PVF) industry is a v9mpetative industry. Hundreds of mfgers, accross hundreds if not thousands of skus